HMRC have also clarified how holiday should be treated in conjunction with furlough leave. Employees can take holiday during a furlough period and it doesn’t affect the minimum 3 week period. They would be entitled to 100% of their pay for the holiday period but the employer could not claim 80% of it back. i.e. employee is furloughed for three weeks, week 3 they have a week’s holiday, the employer can claim furlough for weeks 1 & 2 but not 3 and the employee would need to get 100% pay for week 3 but 1 & 2 could be paid at 80%.

Also, where employees would normally have a bank holiday off, but they are furloughed, this bank holiday should be added to their holiday entitlement – unless the employer opts to pay the bank holiday at 100% and not claim the furlough for that day. For the payrolls we process we are assuming the former, so please let us know if this is not the case.